Asia report: Markets mixed as China's factory activity shrinks again
Stock markets were mixed in Asia at the close on Wednesday, as fresh data out of China showed manufacturing activity there shrinking in May as Covid-19 curbs continued to bite.
In Japan, the Nikkei 225 was up 0.65% at 24,457.89, as the yen weakened 0.56% against the dollar to last trade at JPY 129.39.
Automation specialist Fanuc managed gains of 0.95%, while fashion firm Fast Retailing slipped 0.55% and technology conglomerate SoftBank Group was 1.47% lower.
The broader Topix index advanced 1.36% by the end of trading in Tokyo, settling at 1,938.64.
On the mainland, the Shanghai Composite was 0.13% weaker at 3,182.16, and the technology-heavy Shenzhen Component was ahead 0.21% at 11,551.27.
China’s unofficial Caixin/Markit manufacturing purchasing managers’ index came in at 48.1 for May, up from April’s reading of 46.
It followed Beijing's official manufacturing PMI, which similarly improved month-on-month to 49.6 from 47.4.
Both measures, however, were still below the 50-point level that separates expansion from contraction.
The Caixin measure is widely seen as being more reflective of small-to-medium enterprise in the People’s Republic, while Beijing’s official data is focussed on large and state-affiliated industry.
Craig Botham at Pantheon Macroeconomics said the Caixin survey underperformed its official counterpart, particularly in employment and new export orders.
“Given the greater weight of smaller and private sector firms in the Caixin PMI, and the underperformance of small firms in the official manufacturing PMI, this is not a huge surprise, but it should still worry policymakers, given the importance given to SMEs lately,” he noted.
“As with the official PMI, the Caixin index suggests further weakness of industrial production and exports in May.
“It should return to growth territory in June, as reopening progresses.”
Elsewhere, South Korea’s markets were closed for the country’s Local Election Day, while the Hang Seng Index in Hong Kong lost 0.56% to 21,294.94.
Oil prices were higher at the end of the Asian day, with Brent crude last up 1.41% at $117.23 per barrel on ICE, and the NYMEX quote for West Texas Intermediate rising 1.4% to $116.27.
In Australia, the S&P/ASX 200 was up 0.32% at 7,234.00, after data showed the sunburnt country’s economy growing more than expected in the first quarter.
According to the Australian Bureau of Statistics, gross domestic product rose a seasonally-adjusted 0.8% during the three months, above the 0.5% pencilled in by economists polled by Reuters.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.57% firmer at 11,373.24, led higher by cancer diagnostics developer Pacific Edge, which rocketed 16.9%.
The company announced earlier in the session that United States healthcare giant Kaiser Permanente had confirmed it was adding its ‘Cxbladder’ test for bladder cancer to its electronic records system, meaning demand for the test is expected to soar in the US.
It was a mixed picture for the down under dollars against the greenback, with the Aussie last 0.23% stronger at AUD 1.3901, while the Kiwi weakened 0.08% to NZD 1.5358.
Reporting by Josh White at Sharecast.com.